UN Secretary General Ban Ki-moon warned Western powers today "there is no military solution" to the Ukraine crisis, after the government in Kiev accused Russia of launching a "great war".

As NATO prepares to upgrade its combat readiness in eastern Europe, Ban said he was greatly concerned at developments in Ukraine and wanted to avoid further deterioration to "a very chaotic and dangerous situation".

"I know the European Union, the Americans and most of the Western countries are discussing very seriously among themselves how to handle this matter," he told reporters during a visit to New Zealand.

"What is important at this time is that they should know there is no military solution in this. There should be a political dialogue for a political solution, that is the more sustainable way," Ban stressed.

His comments came after European-mediated talks on the fast-escalating crisis opened yesterday behind closed doors in the Belarussian capital Minsk, attended by Ukraine government, separatist and Russian envoys.

The rebels have launched a major counter-offensive in recent days that the Ukrainian government and its Western allies claim is backed by Russian forces -- a charge Moscow denies.

Ukraine's Defence Minister Valeriy Geletey vowed yesterday to "immediately mount defences against Russia, which is trying not only to secure positions held by terrorists before but to advance on other territories of Ukraine".

"A great war arrived at our doorstep, the likes of which Europe has not seen since World War II," he wrote on Facebook, warning of "tens of thousands of deaths".

Russian agencies quoted rebel representatives at the Belarus meeting demanding that Kiev provide the separatist regions of Donetsk and Lugansk with a "unique procedure" that would let them integrate closer with Russia.

The developments came a day after Russian President Vladimir Putin said for the first time that the issue of "statehood" should be discussed in talks on the crisis in the east, where fighting has killed more than 2,600 people since mid-April.

Incoming EU chief diplomat Italian Foreign Minister Federica Mogherini will on Tuesday outline to the European parliament's foreign affairs committee her view of the Ukraine crisis along with other international issues.

On the ground, Kiev said its forces south of the rebel hub of Lugansk were forced to retreat from the local airfield and a nearby village after withstanding artillery fire and fighting a Russian tank battalion.